A $35 million fraud and money-laundering scandal that ensnared Newsweek magazine and a small, California bible college wrapped up Friday with guilty pleas from two executives who had helped mastermind the scheme.
Etienne Uzac, former co-owner of IBT Media, which owned Newsweek; and William Anderson, former CEO of Christian Media, both pleaded guilty on Friday before Manhattan District Judge Ruth Pickholz to one count of money laundering and one count of fraud in a bid to avoid getting tossed in the slammer.
Money from fraudulently obtained loans for computer equipment was used to keep their media operations afloat, to pay off past loans and to buy up land in upstate New York where tiny San Francisco-based Olivet University hoped to establish an East Coast campus, prosecutors claimed.
Judge Pickholtz accepted the guilty pleas in exchange for a promise of no jail time — but said she could revoke the offer if new information came to light before their April 20 sentencing.
If that happens, the defendants will be permitted to withdraw their guilty pleas, the judge said.
“I’m just focusing on getting this behind us,” Uzac, who severed ties with Newsweek and IBT Media in March 2018, told The Post after the hearing.
The guilty pleas came after nearly a four-year investigation by Manhattan District Attorney Cyrus Vance, which had included a January 2018 raid on Newsweek offices, in which 18 computer servers were carted away.
Uzac and Anderson are only the latest to cop pleas. Computer-equipment vendor Oikos Networks, which was accused of selling cheap servers to the college at inflated prices as part of the scheme, pleaded guilty to its role in the fraud on Feb. 11.
IBT, which still owns Newsweek, also pleaded guilty to fraud on Feb. 11. CMC pleaded guilty to falsifying business records and criminal contempt in the second degree in December. IBT and CMC were each hit with $50,000 fines.
The money-laundering charges had embroiled Newsweek in a separate controversy as staff tried to figure out what their bosses were up to. Editor-in-chief Bob Roe and executive editor Ken Li tried to investigate the owners of the company and their ties to Olivet but were fired in January 2018 before the story ran.
Nancy Cooper was installed as editor-in-chief in February that year and managed to publish the story “Why is the Manhattan DA looking into Newsweek’s ties to a Christian University?” But that wasn’t before journalists claimed that IBT executives tried to force them to reveal confidential sources before publication. Cooper led the staff in publishing a letter accompanying the article claiming IBT engaged in “egregious breaches of journalism ethics.”
The owners of IBT Media were all followers of the Korean cleric David Jang, whose followers were also involved in founding the fundamentalist Christian college Olivet University. It had a small campus in San Francisco and had plans to open a sprawling second campus in Wingdale, NY about 75 miles north of Manhattan, but those plans never came to fruition. Most of the buildings still have bars on the windows and remain as ghostly reminders of its former use as the Hudson Valley Pyschiatric Center.
Olivet University and Andrew Lin, the former chairman of the board of trustees at the college, still face charges and are due back in court Feb. 20 to enter their own pleas.